As printed in our January 10, 2013 issue...

CLASS III FUTURES REBOUNDED 20 cents from late November trading to average $18.58 for the first nine months of 2013. However, these contracts remain $2.35 lower than October and November Class III prices.

DAIRY PRODUCT PRICES STABILIZED near year's end after falling over 30 cents throughout November. Spot cheese blocks had traded above $1.70 per pound at the magazine's close; butter stood at $1.56.

GLOBAL PRODUCT PRICES ROSE 1.1 PERCENT in late December. The eight-product index averaged $1.65-1/2 per pound; Cheddar was up 4.9 percent. Meanwhile, USDA has projected a $19.55 All Milk price for 2013.

PROSPECTS OF A NEW FARM BILL faded at year's end. At press time, it appeared the new Congress would tackle the issue during 2013.

CORN PRICES ARE DOWN over $1 per bushel, or 13 percent, since its late summer peak. Soybeans have dropped more than $3 during the same time.

STRONG CROP FORECASTS in Argentina and Brazil have softened soybean prices as did a substantial canceled order from China for U.S beans.

U.S. ETHANOL PRODUCTION FELL due to this year's robust corn prices. It also opened a floodgate of sugar-derived ethanol imports from Brazil which were up nearly ninefold through October compared to last year.

IF SOIL AND WEATHER conditions returned to normal, crop prices could drop further. However, 96 percent of Nebraska, 42 percent of Iowa and 25 percent of Minnesota remain in the two worst drought categories.

HIGH FEED COSTS CONTINUE TO HAMPER all producers, especially those in the west. Feed costs ranged from $11.15 to $11.92 per cwt. for herds in California, Arizona, New Mexico and Texas during the first half of the year, reported Frazer LLP, a certified public accounting firm.

AS A RESULT, MILK FLOW continued downward in all four of those states this November: California, down 2.3; Arizona, -2.0; New Mexico, -4.0; and Texas, -3.7. Washington, Missouri and Florida dropped as well.

OVERALL, NOVEMBER MILK WAS UP 1.1 percent nationally. Wisconsin rose 4.7 percent with Colorado, 6.5 percent, and Kansas, 6.1, among the leading gainers. Cow numbers declined 78,000 since the April peak.

DAIRY EXPORTS LEVELED OFF in October compared to the previous month and the same time last year. With two months remaining, 2012 was still on track to top $5 billion and represent over 13 percent of production.

BRIEFLY: Members of three cooperatives, Family Dairies USA, Manitowoc Milk Producers Cooperative and Milwaukee Cooperative Milk Producers, voted to merge into FarmFirst Dairy Cooperative. It is the Midwest's largest dairy marketing co-op. USDA has relented on previously enacted limits of meats and grains in school lunches